408.206
408.206
Completion or alteration of certificated security or initial transaction statement. 408.206(1)
(1) If a certificated security contains the signatures necessary to its issue or transfer but is incomplete in any other respect:
408.206(1)(a)
(a) Any person may complete it by filling in the blanks as authorized; and
408.206(1)(b)
(b) Even though the blanks are incorrectly filled in, the security as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.
408.206(2)
(2) A complete certificated security that has been improperly altered, even though fraudulently, remains enforceable but only according to its original terms.
408.206(3)
(3) If an initial transaction statement contains the signatures necessary to its validity, but is incomplete in any other respect:
408.206(3)(a)
(a) Any person may complete it by filling in the blanks as authorized; and
408.206(3)(b)
(b) Even though the blanks are incorrectly filled in, the statement as completed is effective in favor of the person to whom it is sent if he or she purchased the security referred to therein for value and without notice of the incorrectness.
408.206(4)
(4) A complete initial transaction statement that has been improperly altered, even though fraudulently, is effective in favor of a purchaser to whom it has been sent, but only according to its original terms.
408.206 History
History: 1985 a. 237.
408.207
408.207
Rights and duties of issuer with respect to registered owners and registered pledgees. 408.207(1)
(1) Prior to due presentment for registration of transfer of a certificated security in registered form, the issuer or indenture trustee may treat the registered owner as the person exclusively entitled to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.
408.207(2)
(2) Subject to
subs. (3),
(4) and
(6), the issuer or indenture trustee may treat the registered owner of an uncertificated security as the person exclusively entitled to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.
408.207(3)
(3) The registered owner of an uncertificated security that is subject to a registered pledge is not entitled to registration of transfer prior to the due presentment to the issuer of a release instruction. The exercise of conversion rights with respect to a convertible uncertificated security is a transfer within the meaning of this section.
408.207(4)
(4) Upon due presentment of a transfer instruction from the registered pledgee of an uncertificated security, the issuer shall:
408.207(4)(a)
(a) Register the transfer of the security to the new owner free of pledge, if the instruction specifies a new owner (who may be the registered pledgee) and does not specify a pledgee;
408.207(4)(b)
(b) Register the transfer of the security to the new owner subject to the interest of the existing pledgee, if the instruction specifies a new owner and the existing pledgee; or
408.207(4)(c)
(c) Register the release of the security from the existing pledge and register the pledge of the security to the other pledgee, if the instruction specifies the existing owner and another pledgee.
408.207(5)
(5) Continuity of perfection of a security interest is not broken by registration of transfer under
sub. (4) (b) or by registration of release and pledge under
sub. (4) (c), if the security interest is assigned.
408.207(6)
(6) If an uncertificated security is subject to a registered pledge:
408.207(6)(a)
(a) Any uncertificated securities issued in exchange for or distributed with respect to the pledged security shall be registered subject to the pledge;
408.207(6)(b)
(b) Any certificated securities issued in exchange for or distributed with respect to the pledge security shall be delivered to the registered pledgee; and
408.207(6)(c)
(c) Any money paid in exchange for or in redemption of part or all of the security shall be paid to the registered pledgee.
408.207(7)
(7) Nothing in this chapter shall be construed to affect the liability of the registered owner of a security for calls, assessments or the like.
408.207 History
History: 1985 a. 237.
408.207 Annotation
The issuer may continue to recognize the registered owner of a security, even after the security has been transferred, so long as the new owner has not made a due presentation for registration of transfer. Huffman v. Altec International, Inc. 200 W (2d) 78, 546 NW (2d) 162 (Ct. App. 1996).
408.207 Annotation
Owner of stock could not hold corporation liable for wrongfully redeeming stock that owner had left in possession and registered in name of owner's agent. Kerrigan v. American Orthodontics Corp.,
960 F. 2d 605 (1992).
408.208
408.208
Effect of signature of authenticating trustee, registrar or transfer agent. 408.208(1)
(1) A person placing his or her signature upon a certificated security or an initial transaction statement as authenticating trustee, registrar, transfer agent, or the like, warrants to a purchaser for value of the certificated security or a purchaser for value of an uncertificated security to whom the initial transaction statement has been sent, if the purchaser is without notice of the particular defect, that:
408.208(1)(a)
(a) The certificated security or initial transaction statement is genuine;
408.208(1)(b)
(b) His or her own participation in the issue or registration of the transfer, pledge or release of the security is within his or her capacity and within the scope of the authority received by him or her from the issuer; and
408.208(1)(c)
(c) He or she has reasonable grounds to believe that the security is in the form and within the amount the issuer is authorized to issue.
408.208(2)
(2) Unless otherwise agreed, a person by so placing his or her signature does not assume responsibility for the validity of the security in other respects.
408.208 History
History: 1985 a. 237;
1991 a. 316.
PURCHASE
408.301
408.301
Rights acquired by purchaser. 408.301(1)
(1) Upon transfer of a security to a purchaser (
s. 408.313) the purchaser acquires the rights in the security which his or her transferor had or had actual authority to convey unless the purchaser's rights are limited by
s. 408.302.
408.301(2)
(2) A transferee of a limited interest acquires rights only to the extent of the interest transferred. The creation or release of a security interest in a security is the transfer of a limited interest in that security.
408.301 History
History: 1985 a. 237.
408.302
408.302
"Bona fide purchaser"; "adverse claim"; title acquired by bona fide purchaser. 408.302(1)
(1) A "bona fide purchaser" is a purchaser for value in good faith and without notice of any adverse claim:
408.302(1)(a)
(a) Who takes delivery of a certificated security in bearer form or in registered form, issued or endorsed to him or her or in blank;
408.302(1)(b)
(b) To whom the transfer, pledge or release of an uncertificated security is registered on the books of the issuer; or
408.302(2)
(2) "Adverse claim" includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security.
408.302(3)
(3) A bona fide purchaser in addition to acquiring the rights of a purchaser (
s. 408.301) also acquires his or her interest in the security free of any adverse claim.
408.302(4)
(4) Notwithstanding
s. 408.301 (1), the transferee of a particular certificated security who has been a party to any fraud or illegality affecting the security, or who as a prior holder of that certificated security had notice of an adverse claim, cannot improve his or her position by taking from a bona fide purchaser.
408.302 History
History: 1985 a. 237.
408.303
408.303
"Broker". "Broker" means a person engaged for all or part of his or her time in the business of buying and selling securities, who in the transaction concerned acts for, buys a security from, or sells a security to, a customer. Nothing in this chapter determines the capacity in which a person acts for purposes of any other statute or rule to which the person is subject.
408.303 History
History: 1985 a. 237.
408.304
408.304
Notice to purchaser of adverse claims. 408.304(1)
(1) A purchaser, including a broker for the seller or buyer but excluding an intermediary bank, of a certificated security is charged with notice of adverse claims if:
408.304(1)(a)
(a) The security, whether in bearer or registered form, has been endorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or
408.304(1)(b)
(b) The security is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. The mere writing of a name on a security is not such a statement.
408.304(2)
(2) A purchaser, including a broker for the seller or buyer, but excluding an intermediary bank, to whom the transfer, pledge or release of an uncertificated security is registered is charged with notice of adverse claims as to which the issuer has a duty under
s. 408.403 (4) at the time of registration and which are noted in the initial transaction statement sent to the purchaser or, if his or her interest is transferred to him or her other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.
408.304(3)
(3) The fact that the purchaser, including a broker for the seller or buyer, of a certificated or uncertificated security has notice that the security is held for a 3rd person or is registered in the name of or endorsed by a fiduciary does not create a duty of inquiry into the rightfulness of the transfer or constitute constructive notice of adverse claims. However, if the purchaser, excluding an intermediary bank, has knowledge that the proceeds are being used or the transaction is for the individual benefit of the fiduciary or otherwise in breach of duty, the purchaser is charged with notice of adverse claims.
408.304 History
History: 1985 a. 237.
408.305
408.305
Staleness as notice of adverse claims. An act or event that creates a right to immediate performance of the principal obligation represented by a certificated security or sets a date on or after which a certificated security is to be presented or surrendered for redemption or exchange does not itself constitute any notice of adverse claims except in the case of a transfer:
408.305(1)
(1) After one year from any date for presentment or surrender for redemption or exchange; or
408.305(2)
(2) After 6 months from any date set for payment of money against presentation or surrender of the security if funds are available for payment on that date.
408.305 History
History: 1985 a. 237.
408.306
408.306
Warranties on presentment and transfer of certificated securities; warranties of originators of instructions. 408.306(1)(1) A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that he or she is entitled to the registration, payment or exchange. But, a purchaser for value and without notice of adverse claims who receives a new, reissued or reregistered certificated security on registration of transfer or receives an initial transaction statement confirming the registration of transfer of an equivalent uncertificated security to him or her warrants only that he or she has no knowledge of any unauthorized signature (
s. 408.311) in a necessary endorsement.
408.306(2)
(2) A person by transferring a certificated security to a purchaser for value warrants only that:
408.306(2)(b)
(b) The security is genuine and has not been materially altered; and
408.306(2)(c)
(c) He or she knows of no fact which might impair the validity of the security.
408.306(3)
(3) If a certificated security is delivered by an intermediary known to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim against delivery, the intermediary by delivery warrants only his or her own good faith and authority even though he or she has purchased or made advances against the claim to be collected against the delivery.
408.306(4)
(4) A pledgee or other holder for security who redelivers a certificated security received, or after payment and on order of the debtor delivers that security to a 3rd person, makes only the warranties of an intermediary under
sub. (3).
408.306(5)
(5) A person who originates an instruction warrants to the issuer that:
408.306(5)(a)
(a) He or she is an appropriate person to originate the instruction; and
408.306(5)(b)
(b) At the time the instruction is presented to the issuer he or she will be entitled to the registration of transfer, pledge or release.
408.306(6)
(6) A person who originates an instruction warrants to any person specially guaranteeing his or her signature (
s. 408.312 (3)) that:
408.306(6)(a)
(a) He or she is an appropriate person to originate the instruction; and
408.306(6)(b)
(b) At the time the instruction is presented to the issuer:
408.306(6)(b)1.
1. He or she will be entitled to the registration of transfer, pledge or release; and
408.306(6)(b)2.
2. The transfer, pledge or release requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction.
408.306(7)
(7) A person who originates an instruction warrants to a purchaser for value and to any person guaranteeing the instruction (
s. 408.312 (6)) that:
408.306(7)(a)
(a) He or she is an appropriate person to originate the instruction;
408.306(7)(b)
(b) The uncertificated security referred to therein is valid; and
408.306(7)(c)
(c) At the time the instruction is presented to the issuer:
408.306(7)(c)1.
1. The transferor will be entitled to the registration of transfer, pledge or release;
408.306(7)(c)2.
2. The transfer, pledge or release requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction; and
408.306(7)(c)3.
3. The requested transfer, pledge or release will be rightful.
408.306(8)
(8) If a secured party is the registered pledgee or the registered owner of an uncertificated security, a person who originates an instruction of release or transfer to the debtor or, after payment and on order of the debtor, a transfer instruction to a 3rd person, warrants to the debtor or the 3rd person only that he or she is an appropriate person to originate the instruction and at the time the instruction is presented to the issuer, the transferor will be entitled to the registration of release or transfer. If a transfer instruction to a 3rd person who is a purchaser for value is originated on order of the debtor, the debtor makes to the purchaser the warranties of
sub. (7) (b) and
(c) 2. and
3.
408.306(9)
(9) A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants only that:
408.306(9)(a)
(a) His or her transfer is effective and rightful; and
408.306(10)
(10) A broker gives to his or her customer and to the issuer and a purchaser the applicable warranties provided in this section and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of his or her customer.
